Meta Platforms, Inc.

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Jul 272023

META: Meta Stock Jumps 7% on AI Hype but Metaverse Losses Pile to $40bn

Meta CEO Mark Zuckerberg has shifted his attention to emerging AI tools while quietly nursing a huge loss in the metaverse.

  • Meta stock (ticker: META) shot up about 7% in after-hours trading after the Facebook and Instagram owner reported better-than-expected Q2 results. For the quarter, Meta added $32bn in revenue, up 11% year-over-year, and above consensus of $31bn. Profits arrived at $2.98 a share, topping forecasts of $2.89.
  • Meta CEO Mark Zuckerberg said that AI-boosted efforts to personalize feeds were “already paying off.” Zuck’s previous heavy bet, metaverse, topped $40bn in losses and more are likely coming. But investors chose to ignore that and focus instead on the highly promising AI tech, first touted in the Q1 update, as the next big revenue generator.
  • Looking ahead, Meta expects even higher revenue figures. For the current quarter, the big tech giant is aiming to scoop up revenue of $32bn to $34.5bn. Full-year total expenses are projected to land between $88bn and $91bn. Meta stock has soared this year, adding more than 140% to its valuation.
Illustration by TradingView
Jul 052023

META: Meta’s Twitter Rival Launch Announcement Fails to Impress Investors

Threads will be released as soon as Thursday and will be paired with Instagram. Meta stock flashed but a blip.

  • In another hot pursuit of outpacing the competitors, Mark Zuckerberg’s Meta Platforms has taken aim at Twitter. The stand-off comes shortly after Elon Musk, who ponied up $44bn for the messaging platform, introduced temporary limits on the number of tweets users can view.
  • Zuck’s app is called Threads and it will be, much like Twitter, a microblogging service. It is tied directly to Instagram and it should be released on Apple’s App Store tomorrow. It is the latest effort by Meta to venture into new revenue streams. Other such initiatives include a cash-burning metaverse and AI-powered app features.
  • Lots of questions remain: how will Threads be monetized? What user data will the service collect? Will it copy some Twitter features? In any case, investors weren’t too hyped as Meta stock (ticker: META) stayed muted. Someone else won’t stay muted as Musk and Zuck are likely gearing up for a cage match showdown at the Colosseum.
Roman Martyniuk / Unsplash
May 232023

META: Meta Receives $1.3bn Fine From European Data Privacy Regulator

  • Facebook parent Meta has been fined $1.3bn by European Data Privacy Regulators.
  • The fine was issued due to Meta’s practises of transferring EU user data to the US.
  • It is the largest fine ever issued by Data Privacy Regulators in Europe.

Facebook and WhatsApp parent company Meta has just been hit with the largest fine ever issued by European privacy regulators. The tech giant was fined $1.3bn by Ireland’s Data Protection Commission (DPC) for allegedly mishandling user data by transferring it from Europe to the US. Meta was determined to be responsible for exposing European citizens to the comparatively weaker data protection laws of the US.

What happens now?

The company was also banned from transferring European user data to the US for 5 months. Unsurprisingly, Meta representatives have said that the tech giant will appeal the fine – describing the ruling as “unnecessary and unjust”.

The fine has also renewed calls for a standardized protocol for cross-border data transfers to be established to prevent leaks. As for Meta’s share price – investors don’t seem to be concerned with the ruling, with META having risen nearly 5% over the past week.

(About Meta)
Meta is a multinational technology company that specializes in developing and providing various digital platforms and services. Formerly known as Facebook, the company changed its name to Meta in 2021 to reflect its broader vision and focus on building the metaverse. Meta invests heavily in research and development, collaborating with experts across various fields – particularly in the fields of augmented and virtual reality. Meta has faced challenges regarding privacy and data practices in the past, and continues to face scrutiny for its data handling practices today.
Apr 272023

META: Meta Reveals It Is Now on the AI Train, Stock Ticks Up 12%

Meta investors cheered the company’s pivot to an AI-powered future in what Zuckerberg calls the year of “efficiency.”

  • Facebook parent Meta reported blowout earnings figures that sent its stock soaring by 12% in the off hours on Thursday. Mark Zuckerberg’s social empire pulled in $28.65bn in revenue, above the $27.7bn expected. The better news? Meta is looking for ways to harness AI through new features for its set of apps.
  • Shares of the Facebook parent are on a tear this year. For the period, Meta is up nearly 70% ahead of the opening bell. Investors wait to see another 12%, or $50bn, poured into the company’s valuation of roughly $540bn. Still, the stock’s present worth is about 50% lower from its all-time high of $382 a share.
  • Can we expect another name change to match the latest AI hype? Likely not. But at least the chances of spinning up a profit in Meta’s AI ventures are higher. Meta’s metaverse division incinerated $4bn in the last quarter, adding to the $14bn loss in the previous year alone.
Mariia Shalabaieva / Unsplash
Apr 052023

META: Meta Looks Well Positioned to Deal with 2023 Uncertainty After a Rocky 2022

  • Meta is enjoying renewed optimism for its share price with sales growth predicted at 4.7% this year.
  • Meta suffered over the tech market sell off of 2022, with a more than 60% drop in its share price.
  • Analysts believe that its newly implemented cost cutting strategy will be a key driver for Meta’s growth.

A large number of analysts are predicting that Meta’s earnings over 2023 could be on the rise, with its price forecasts being improved across the board. One Morgan Stanley analyst even stated that Meta would be the most durable mega cap company in the event that consumer spending slips further than it has.

Since the start of the year, Meta has been one of the biggest rebound tech stocks after the market selloff last year – logging a 74% gain YTD. As a result, some investors might be thinking they’ve missed an opportunity to make the most of the stock’s resurgence.

Meta’s comeback

2022 was a year to forget for the FAANG stock. Over the course of last year, the tech giant’s shares saw a price drop of over 60% and economic headwinds put pressure on the company, and investors began to question whether the company’s metaverse rebrand was the correct approach. 2023 however seems to be fostering renewed optimism for the owner of Facebook and WhatsApp, with analysts improving their predictions for its future.

What’s made the outlook so positive?

Experts are predicting that Meta’s price cuts will have a significantly beneficial effect on the company’s profitability. Predictions for its sales growth are now marked at 4.7%, with 2024 expected to be the year the company makes its way closer to its previous market highs.

It's not just Meta that’s been enjoying the upswing of the tech market this year. The Nasdaq index has already seen a 18.68% rally since the start of the year. While Meta's share price may have dipped in 2022, analysts are reminding investors that this is a long-term growth story.
Chris Li / Unsplash
Mar 152023

META: META Throws in the Towel on Instagram NFTS

  • Meta has abandoned its plans to integrate NFTs into Instagram and Facebook.
  • The company based itself around web 3 with their Meta name change in 2021.
  • Despite the strategy change, Meta says it's still firmly invested in future technologies.

At the end of last year, Meta announced plans to continue directing a significant portion of its financing to metaverse and web 3 content – against the wishes of its shareholders who were unimpressed with how that approach had affected Meta’s share price in 2022. Could the first cracks be beginning to show in Meta’s sustained attempts in space? Having literally changed their name from Facebook to Meta in 2021, they don’t have much room for maneuver without some damage to their reputation.

What did Meta announce?

According to Meta's head of Fintech, Stephane Kasriel, the tech-giant will be “winding down on NFTs”, with the official reason being to allow them to “focus on other ways to support creators”. It probably comes as quite a shock to investors, as the plan to integrate NFTs into their platforms has now been shut down after less than a year. It’s also fairly surprising, given the fact that Meta had tapped the support of multiple blockchains including Ethereum, Polygon and Flow to provide the service to their users.

Where does Meta go now?

Meta couldn’t really have carried out their web 3 rebrand from Facebook at a worse time. In the months after its rebrand at the end of 2021, the crypto industry saw a catastrophic sell-off and Meta’s share price plummeted. That being said, the company seems determined to make it work, stating that it will continue to invest in fintech “tools for the future”. Its share price has also been having a much more positive year than its last – with a 58% gain YTD. However, the length of investors’ patience for Meta’s yet-unprofiable web 3 plans remains to be seen.
Web Summit / Flickr
Mar 082023

META: Meta Prepares For its Second Round of Layoffs in Four Months

  • Meta is preparing for another round of layoffs after letting go of 13% of its workforce in November.
  • Mark Zuckerberg has described 2023 as Meta’s “Year of efficiency.”
  • The tech giant’s profit margins have been slipping down over the past four quarters.

Tech giant Meta has been taking steps to ensure its longevity in the face of an uncertain tech sector. Having already let go of a staggering 11,000 employees in November last year, it’s now believed that the largest social media company in the world is preparing to let go of even more staff. As the second round of layoffs in four months, it’s taken some by surprise. But by taking a look at the company’s slipping profit margins, it becomes less of a shock.

Post-pandemic fatigue

Meta already let go of 13% of its global workforce in November, reportedly in order to improve the efficiency of its operations. It has been noted that of FAANG stocks, Meta was perhaps the most ‘hiring-happy’ over the covid pandemic, and has also seen the smallest increase in revenue. The layoffs are expected to be set in motion sometime this week, and CEO Mark Zuckerberg has described 2023 as Meta’s “Year of efficiency”.

How has Meta been doing?

2022 was a year to forget for Meta, with its share price falling by 43% over the course of the year. Since the start of 2023 however, it’s been staging something of a comeback with 47% gain YTD. That being said, the company’s profit margins have been slipping over the past year, with the most recently reported margins for Q4 2022 sitting at under 14.5%. That’s in stark contrast to Meta’s margins of the same quarter of the year prior which were almost 31%. Perhaps its job-cutting approach will give it the kick start it needs.
Timon Studler / Unsplash
Mar 022023

Is a TikTok Ban the Gift Meta Needs to Take it Out of its Slump?

  • Joe Biden is set to receive powers which could enable a US ban of TikTok.
  • Concerns surrounding how its Chinese parent company ByteDance uses data could lead to the ban.
  • A ban could be to the benefit of Meta, who’s market share has been eaten by the social media app.

TikTok is probably the most widely discussed app in the world at the moment. US regulators have become increasingly concerned about security risks posed by the Chinese social media service. Most recently, an all-out ban has been on the table. And while that might be terrible news for US TikTok content creators, it could be quite the opposite for struggling tech giant Meta.

What’s being said about TikTok?

Government authorities in the US have advanced a piece of legislation which would give Joe Biden the power to completely ban TikTok if needed. With TikTok commanding over 2% of the global digital ad market, and approximately 67% of teenagers in the US using the app, it would be a substantial shift in the social media market. The app has already been banned from several university campuses as well as US government devices as concerns grow surrounding how its Chinese parent company, ByteDance, uses user data.

What could it mean for Meta

The owner of Facebook, Instagram and Whatsapp, Meta has been struggling to retain its position as the king of social media. Shares in Meta struggled over the past year with a 17% drop as TikTok threatened its dominance in the world of content. Although it has seen a pretty significant rally of 41% since the start of this year.

Some analysts have said that a US ban of TikTok could result in a significant uptick in the consumption of Instagram ‘Reels’, which would be hugely beneficial for Meta’s revenue. Although some users have taken issue with Instagram’s apparent attempt to copy TikTok’s content format. If a TikTok becomes the case however, users may end up not having a choice.
Eyestetix Studio / Unsplash
Feb 212023

Meta Follows Musk’s Twitter in Diversifying from Ad-Revenue Reliance

  • Meta has announced a subscription fee for verification on Facebook and Instagram
  • The move comes after Twitter implemented the same feature to much controversy.
  • The social media giant is seeking to build on its more consistent revenue streams.

In a move that will likely cause a sigh amongst social media users and investors alike, Meta has announced plans to introduce a paid subscription model for its verification service. The subscription will be priced at $11.99 for web users and $14.99 for iOS users – and will require the submission of government ID. It’s due to be rolled out in Australia and New Zealand before coming to more countries, and users will need to be at least 18 to subscribe to the service.

Why now?

The move comes shortly after Musk tweaked his newly-acquired Twitter to begin charging users for verification in November – a move which was met with significant controversy as its anti-impersonation features were found to be lacking. Specifically, a Twitter account abused the system and gained verification while impersonating pharmaceutical company Eli Lilly, to Tweet that it would be making insulin free. It was such a problem in fact that Twitter had to pause the service for almost a month. So why might Meta be seeking to copy Twitter in this offering?

The main reason might be that ad-revenue is down from its previous highs and antitrust laws are threatening to compromise the revenue stream. Other sources of revenue are beginning to look extremely appealing to social media companies. The war in Ukraine has also put pressure on Meta’s business model, and a subscription model offers a consistent and predictable source of revenue amid uncertain economic conditions.

How’s Meta been doing?

Meta’s profits have been slipping downwards, which might be another reason for its new subscription plan. Its most recently reported quarterly profit margin was 14.46% for Q4 2022, compared to a margin of 30.55% for the same quarter a year prior. With quarterly margins down by over 50% in the space of a year, the tech giant might be feeling it needs to get serious about other sources of revenue if its operations are to remain viable. Will this be another Twitter-esque verification disaster? Only time will tell.
ilgmyzin / Unsplash
Feb 062023

Meta finally moves fast and breaks things

Is it time to bring back the “Move Fast and Break Things” motto that Facebook had until 2014?

  • Facebook parent Meta Platforms soared 25% last week, notching its best daily gain on Thursday in nearly a decade. The social media behemoth posted better-than-expected sales, upbeat guidance, and pledged an investor-friendly move to initiate a $40bn share buyback.
  • The stock is making a super strong comeback so far in 2023 as shares are up more than 50% since the turn of the year. What’s more, Meta has doubled in valuation since its multi-year low of $87 a share in October and is now flaunting a market value of just under $500bn.
  • The owner of Facebook, WhatsApp, and Instagram reported Q4 revenue of $32.2bn and cut 2023 expenses outlook by $5bn. Metaverse efforts, tho, flopped with $13.7bn incinerated in 2022 as the company struggles to gain traction in the immersive but amorphous virtual world.
Dec 202022

In for a penny...

Facebook parent Meta is refusing to back down from its metaverse stance, even if it's not what investors want to hear.

  • Meta has announced that it will allocate 20% of its spending to metaverse development over 2023, despite criticism that the company has become overly focussed on its VR projects. A top Meta executive said the allocation will allow them to remain “at the leading edge”.
  • The announcement has contributed to Monday’s 4.1% share price drop, with shares in Meta down by a whopping 66% since the start of the year. Its VR/AR development project, Reality Labs, reported more than $9bn in losses from January to September this year. Ouch.
  • Investors in Meta are starting to think that Zuckerberg’s gamble isn’t going to pay off, as the platform’s “app family” still generates considerably more revenue than its VR ventures. On top of that, the tech-giant could face an $11.8bn fine after being charged with breaching antitrust laws by the European Commission this week. So far Meta’s been pushing onwards, but investors might be running out of patience.
Nov 292022

Meta's multi-million mistake

Meta’s been slapped on the wrist for failing to protect users’ personal data – something the tech giant is no stranger to.

  • Meta has been fined $276m by Ireland’s Data Protection Commission for failing to adequately protect user data from “data-scrapers”. The case related to roughly 530m Facebook users having their phone numbers hacked and published last year, for which Meta was found to have not taken appropriate steps to prevent.
  • The tech giant has been racking up the fines recently – accumulating over $900m worth of fines over three separate cases in the last 15 months. European authorities have been turning up the heat on privacy laws for large tech companies recently, and fined Meta subsidiary WhatsApp for handling data improperly last year.
  • Speaking of Meta, the company’s been in the limelight for all the wrong reasons recently. Its metaverse gamble hasn’t exactly paid off and its share price has tumbled by almost 33% in the last three months – making it the worst performing FAANG stock over the period.
Mariia Shalabaieva/ Unsplash
Nov 082022

Hope springs for the Meta-ropolis

Meta investors are giving Zuck the benefit of the doubt as the embattled brand steps up its cost-cutting efforts.

  • Meta is set to start laying off workers as soon as this week, according to a report from the Wall Street Journal, who says the company is getting ready to notify thousands of employees of their redundancy – the social media company said it plans to cut costs by 10% in coming months and, like many, they’re starting with cutting employees.
  • The stock popped 6.54% in its best day since mid-July, though shares are still down a terrifying 71% this year so far – a decline that was accelerated by a dramatic earnings disappointment a couple weeks ago. The company emphasized macro declines as a reason for that, but investors are more concerned about its spending and struggling core business.
  • It will be the first broad reduction in headcount in Meta’s history and will be one of the largest rounds in a recent spate of tech job cuts, potentially outdone by recent layoffs at Twitter HQ, which is heading into Musk’s second week as CEO with half the amount of employees it had when he started – a move that’s already prompted former staff to sue the company.
Pedro da Silva / Unsplash
Oct 272022

“Nothing short of disastrous”

We gotta talk about the metaverse, cause that ship is taking on water faster than the Titanic and investors waiting around to see how far the seabed is.

  • Meta shares plummeted nearly 20% in extended trading on Wednesday after an intraday loss of over 5%, wiping $65bn off its valuation and taking prices to their lowest since March 2016. It came after a mixed Q3 bag that missed on the bottom with EPS of $1.64 vs $1.89 expected on revenues that slightly beat at $27.71bn – though that’s its second consecutive quarter of revenue declines.
  • Its Reality Labs division (in charge of all things virtual reality) is struggling, like, hard. The unit saw its revenue fall by almost 50% from the same time last year to $285m, with losses widening to $3.67bn from $2.63bn last year – the division has lost $9.4bn so far this year, and the path ahead shows no sign of getting easier.
  • Digital advertising is another gaping hole in the hull, adding to a general sense of doom and gloom around big tech as advertisers continue to pull back. That decline in spending prompted Meta to offer disappointing revenue guidance of $32.5bn at the high end, and though it apparently plans to cut costs and increase operational efficiency, investors are far from convinced.
See all reported financials
Alessio Jacona / Wikicommons
Oct 252022

Picking up the pitchforks

Meta shareholders seem to be reaching the end of their tether with the tech giant’s muted finances in the face of its doubt-inducing rebrand.

  • A Meta shareholder has penned an open letter to CEO Mark Zuckerberg, and in essence, they ain’t happy. The investors slammed the brand’s $100bn+ Metaverse experiment, saying such a huge investment "in an unknown future is super-sized and terrifying, even by Silicon Valley standards".
  • They may have a point given the stock’s performance the last year or so since its rebrand – as the shareholder pointed out, the company is down 60% in the last year, and its P/E ration has dropped from 23x to 12x in the last 18 months and now trades at half the average P/E of its peers. Hardly a recipe for shareholder satisfaction, and all eyes will be on earnings tomorrow.
  • "Is the metaverse the next digital frontier or an overhyped money pit?" is the question on market experts’ lips, and they’re pretty divided on the matter. McKinsey forecasts the industry will have a market value of $5tn by 2030, and Citi says it’ll be up to $13tn, but Catalyst thinks all metaverse projects will be dead by 2025 – how Meta performs will likely influence these results.
Aaron Burden / Unsplash
Oct 192022

The defeat of a tech giant

UK regulators remind Meta that no company’s too big for the law, ordering it to let go of animated image platform Giphy.

  • In a rare defeat, Meta’s been ordered to unwind its $400m Giphy deal from 2020 by the UK’s competition watchdog, after the regulator ruled that its acquisition of the animated-image platform would harm competition in the form of Twitter and Snapchat by potentially creating a monopoly in the social media sphere.
  • The decision had already been made in November 2021 but Meta had gone to extreme lengths to appeal the ruling – unsuccessfully, obviously – even after being hit with a record £50.5m for failing to comply with the competition watchdog during the investigation.
  • It’s a pretty huge deal for big tech companies as it’s the first time a regulatory body has ever ordered a tech giant to sell a company for which the acquisition had already been completed, signaling an increase in scrutiny for digital deals, and similar companies have been put on high alert by the news. Who will be next, we wonder?
Steve Johnson / Unsplash
Oct 122022

Skepticism remains

Zuck’s plans for the metaverse are getting bigger and bolder while investors' faith is seemingly going the opposite direction.

  • Meta Connect 2022 took place yesterday and revealed a whole set of metaverse-related news. While the highly anticipated Meta Quest Pro was the star of the show, what everyone is talking about today is the fact they figured out how to give avatars legs, which is apparently super hard. Who knew.
  • Investors finally got some revenue numbers out of the brand, which has till now been kinda cagey about showing any of its metaverse financials. The Quest Store has brought in over $1.5bn from the sale of games and apps so far, and while that sounds like a lot of money, it looks far less impressive compared to the $2.8bn Meta invested into VR last quarter alone.
  • Which could be why the stock spent Tuesday down in the dumps despite the multitude of potentially exciting announcements. Shares lost just under 4% and are now down over 60% in the last year since rebranding at this exact same event in 2021 – so clearly Zuck has yet to convince investors that this was the right move. Will legs be enough to solidify their loyalty?
Vinicius _amnx_ Amano / Unsplash
Sep 222022

It’s cutting season

Meta is determined to get back to its former lean, mean, fighting machine glory and now has plans in place to trim away all the fat.

  • Meta is going to be cutting costs by at least 10% according to a report from the Wall Street Journal, a massive jump from the company’s July forecast for between 2% and 4% cost cuts, hinting that things have gotten worse for Meta since their last disastrous earnings.
  • A large part of those cuts will be to their employee count, and apparently they’ve already started reorganizing departments to steadily reduce their headcount in the next year, telling teams to not expect any influx of engineers or budgets – exactly what every tech employee wants to hear, right?
  • Meta and other social stocks are battling an ad downturn and inflation and investors cheered the decision with a 1% jump in day trading – tho shares are still down 57% YTD, a far worse decline than the broader market. Other tech companies like Alphabet have started similar initiatives, and we can prolly expect more cutting news from competitors soon.
Jul 282022

Meta joins the social media sadness

ICYMI, social media platforms are straight up not having a good time right now, and if you thought the OG Meta would be able to beat the trend… you’d have been wrong.

  • Meta shares slipped 3% in extended trading on Wednesday after the bulls got put firmly in their place. The platform missed on both ends and reported its first ever decline in revenue since going public, posting EPS of $2.46 on revenues that declined 1% YoY to hit $28.82bn. Daily active users (DAUs) marginally beat at 1.97bn, though average revenue per user missed estimates too.
  • Everyone’s eyes were on ad revenue, which was… bad. Advertising across social media platforms has plummeted, partly bc of Apple’s 2021 changes and partly bc of the economy. On top of those pressures, revenues are under strain as it battles TikTok for consumers’ time, leading Meta to make a bunch of overhauls to its core apps (much to the Kardashians’ disdain) and boost its AI spending.
  • How’s the whole metaverse thing going, anyway? Well, hate to sound like a broken record, but bad. Meta is spending heavily on its Reality Labs division, and tho it brought in $452m in revenue, it also incurred losses of $2.8bn to take its YTD losses to a staggering $5.77bn. To add insult to injury, Meta is expecting yet another decline in revenue in the current quarter. Yikes.
See all reported financials
Nathan Dumlao / Unsplash
Jul 042022

Meta makes way for economic headwinds

Mark Zuckerberg hopped on a weekly Q&A and instilled some terror into his employees, telling them to brace themselves for what’s to come.

  • “One of the worst downturns that we've seen in recent history” is how Zuckerberg sees the current economic environment, giving his employees a dire warning on Thursday that would give anyone performance anxiety, preparing them for the tough 2022 that’s still to come.
  • Part of that preparation is job and budget cuts. Meta has cut its plans to hire engineers by 30% – only the latest in a slew of layoffs and hiring freezes in the market – and will be “turning up the heat” on performance management to highlight staffers that can’t meet aggressive goals, saying there are a bunch of people at the company that shouldn't be there. Ouch.
  • Given the above, our hopes and prayers are with Meta’s NFT team, who have just launched new NFT display options on Facebook after integrating the digital asset with Instagram in May. Hopefully it goes better than Meta’s digital wallet Novi, which will have been completely shut down by September.
Anthony Quintano / Wikimedia Commons